fbpx
  • The HR Empire
Business

US Economy Adds 194K Jobs in September, Missing Estimates

US Economy Adds 194K Jobs in September, Missing Estimates

U.S. employers hired fewer workers than expected last month as supplemental unemployment benefits expired.

Nonfarm payrolls increased by 194,000 workers in September as the unemployment rate fell to 4.8%, the Labor Department said Friday. Economists surveyed by Refinitiv were expecting the addition of 500,000 new jobs and the unemployment rate to slip to 5.1%.

The jobs gains in August were revised up to 366,000 from 235,000.

“The labor market recovery continues to hit the brakes this month, but is far from completely stopping,” said Daniel Zhao, senior economist at Glassdoor. “Despite the soft September report, there’s still a cause for optimism in the coming months, as we are beginning to look in the rearview mirror, and the peak of the Delta wave’s repercussions is behind us.”

The September report was the first since the $300 per week in supplemental unemployment benefits expired on September 5. Economists are still assessing the impact of the Child Tax Credit, which pays families up to $3,600 per child per year. Also having an impact going forward will be the mandatory vaccine requirements being enforced by a growing number of companies.

Notable job gains occurred in leisure and hospitality (+74,000) were led by the arts, entertainment, and recreation sector (+43,000). Hiring in food services and drinking places was little changed for a second straight month after averaging a monthly gain of 197,000 from January through July. Professional and business services (+60,000), retail trade (+56,000), and transportation and warehousing (+47,000) also saw sizable gains.

Both local government education (-144,000) and state government education (-17,000) lost jobs last month.

The number of workers reentering the labor force decreased by 198,000 last month to 2.3 million. The labor force participation rate was little changed at 61.6% and was 1.7 percentage points below its February 2020 level. The rate has held between 61.4% and 61.7% since June 2020.

Average hourly earnings rose 0.6% in September and were up 4.6% year over year. Economists were expecting a 0.4% monthly increase and a 4.6% year-over-year gain.

“After looking like almost a done deal, today’s jobs number has thrown expectations for tapering into disarray,” said Principal Global Investors Chief Strategist Seema Shah, adding that the hotter-than-expected hourly wage growth presents the Fed with a “real conundrum.”

The Fed will hold a two-day meeting that concludes on November 3. The central bank could, at that point, announce plans to taper its $120 billion per month of asset purchases. A rate hike is not expected until late next year.

Previous ArticleNext Article

Related Posts